As the legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) continues, pro-crypto lawyer John Deaton has emerged as a prominent figure, offering his insights and opinions on the security status of the XRP cryptocurrency. Known for his vocal support of Ripple and his extensive knowledge of the ongoing lawsuit, Deaton recently engaged in a Twitter conversation shedding light on the impact of the SEC’s actions on XRP’s adoption and investor awareness.
In a Twitter exchange with a user named Caesar Korvinus, Deaton responded to the user’s statement that his decision to invest in XRP was influenced by the composition of Ripple Labs’ board and the expertise of its Chief Technical Officer, David Schwartz. Deaton acknowledged that if Ripple had directly sold XRP to an investor, the argument could be made that the Howey test, used to determine whether an investment qualifies as a security, could be met.
Under the Howey test, an investment is deemed a security if it involves: 1) an investment of money, 2) in a common enterprise, 3) with an expectation of profits solely from the efforts of others. However, Deaton emphasized that if XRP was acquired in the secondary market without a direct contract with Ripple or for non-investment purposes, such as utilizing XRP for transactions on the ledger or decentralized exchanges (DEX), the situation would be different. He asserted that the sale of an investment contract by Ripple utilizing XRP as the underlying asset does not automatically classify XRP itself as a security.
Deaton, the founder of CryptoLaw.US and a supporter of Ripple, has been closely following the SEC-Ripple lawsuit. In a separate tweet, he highlighted his belief that the large number of XRP wallets could be attributed to the SEC’s legal action against Ripple, which inadvertently raised awareness of the cryptocurrency.
Expressing his views on the matter, Deaton suggested that the SEC’s lawsuit had inadvertently served as a “promotion campaign” for XRP. He argued that many XRP holders had become aware of Ripple and its associated controversies solely due to the SEC’s legal proceedings. Deaton highlighted the fact that there are millions of XRP addresses worldwide, and not all investors are closely following the developments with the SEC in the United States.
Addressing skepticism about the credibility of affidavits submitted by XRP holders who had purchased the cryptocurrency after the lawsuit commenced, Deaton pointed out that XRP ownership extends beyond the United States. He cited examples of XRP addresses from countries like Japan, Mexico, the Netherlands, and Australia, emphasizing that not everyone in the world pays close attention to the SEC’s actions.
John Deaton’s remarks provide a unique perspective on the ongoing debate surrounding XRP’s security status. As Ripple and the SEC continue their legal proceedings, the opinions and arguments put forth by Deaton and other experts in the cryptocurrency industry will play a significant role in shaping the outcome of this high-stakes lawsuit. With the cryptocurrency landscape constantly evolving, it remains to be seen how regulatory authorities worldwide will address the classification and regulation of digital assets like XRP in the future.
Source: https://azcoinnews.com/pro-crypto-lawyer-john-deaton-challenges-xrps-security-status-amid-sec-lawsuit.html